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Small Caps Reverse Hard Intraday As Stocks Close Well Off The Highs Of The Session

|Includes: Apple Inc. (AAPL), DIA, IWM, PCLN, QQQ, SPY

Positive ISM figures helped the market surge to the session highs only to see sellers take away the day's gains. ISM Manufacturing grew more than expected and buyers jumped at the chance to move into the market. However, by the afternoon cracks began to become apparent whereby AAPL and small caps began to turn lower. Selling continued throughout the remainder of the trading session with small caps leading the charge lower. PCLN and AAPL helped drag the NASDAQ lower, but the index was able to close in positive territory. Volume was higher on the day and with the mixed action does not instill confidence in this market. Mixed action overall and we continue to operate under a cautious buy signal.

AAPL continues to struggle after its earnings release. The stock is trading quite loose and is in danger of losing its 50 day moving average. There is no doubt that if AAPL turns sour you can almost guarantee the market will move lower in sympathy. Price should dictate on how you trade and this instance there is no need to anticipate the move. Stay patient and let price confirm the move before acting.

Crude oil was higher on the day as the commodity continues to hang above $100 a barrel. Given prices are staying high the continued stress on the average Joe continues. What is interesting is the math simply doesn't compute with oil this high and the market being able to absorb the high prices. This is precisely why we only pay attention to price in this market. Our opinions are very much useless in the market as they are often wrong. Logic simply doesn't work only price!

Tomorrow we'll get a read on the jobs market with the ADP employment report set to hit the airwaves. This Friday we'll get a read on jobs from the month of April and if it was like last months we'll have a very tough market to deal with. There isn't any sense to go ahead and jump the gun because no one can predict the future, not by a long shot. Stick with the trend.

Happy Trading! Cut those loses short.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.